In our view India 4G ecosystem will benefit from China?s scale of 4G smartphone sales. China Mobile is currently the world?s largest operator in terms of TD-LTE 4G deployment with estimated 1 mn BTS by Dec-15. As China Mobile operates on 2300 MHz, 1800 MHz, we
note that Indian telcos like Jio, Bharti could help take advantage of the scale economics benefits from China. We note that China?s 4G footprint is much bigger than India given higher investments made by China telcos and larger spectrum pool.
China Mobile launched 4G services in December?13. Since then, the shipment for 4G handsets has shown tremendous growth, picking up to 87% share of the total shipments in July?15. The share of 4G handsets shipments grew to 82% from just 16% within just 10 months between April?14 to Feb?15. In India, Jio is hopeful of achieving similar growth in 4G smartphones. Jio expects the low-end 4G smartphone price to be Rs 4000 (USS$ 61) vs. current low-end 4G smartphone price in China being US$ 70.
Overtime, we expect price-points for 800+1800+2300 MHz enabled 4G smartphones (compatible with TD and FD-LTE networks) to materially decline led by scale economy benefits
